Looking Ahead: Banking Industry Primed for Tech InnovationMay 4, 2021
For industries like it, the question during the pandemic became one of expanding adoption of virtual practices and use of technology already in place rather than having to invent new interfaces on the fly. For a sector primed for further rapid innovation and consumer adoption, the years ahead hold critical questions about the future of brick and mortar, the role of technology and big data in meeting consumer demand, and equity and wealth distribution.
How Is Artificial Intelligence Shaping Financial Management?
With massive volumes of data being generated by networked devices – and backed by advances incomputing power – the use of Artificial and Machine Learning continues to accelerate. The financial services industry is harnessing the power of AI and ML to help reduce exposure to fraud, execute faster payments, and provide data-driven business insights.
While AI and ML drive automation, optimization and intelligence throughout the financial services ecosystem, the adoption and integration of AI-based engines and ML algorithms is perhaps most palpable in treasury management. Because of ML’s propensity for recognizing patterns in data and behavior, it is commonly employed to help identify fraudulent transactions.
The convergence of mobile technology and digital commerce has ushered in real-time payment innovations, and can allow participants to send and receive funds immediately at any time. AI- and ML-enabled technologies are crucial for monitoring and analyzing transactions in the fractions of a second necessary to facilitate real-time payments. Machine learning is no longer a curiosity or novelty, it’s a business imperative.
– Ric Devore, Regional President, PNC
What Does the Future of the Customer’s Relationship with a Bank Look Like?
The trend toward customer use of digital services was well underway pre-pandemic, but COVID-19accelerated the adoption of digital banking across every customer segment. In many cases, we see customers who had never leveraged our digital technologies now utilizing them on a regular basis.
Today, about 70% of Bank of America consumer households and small business clients as well as 77% wealth management clients are digitally active. We predict that soon 90% of cash transactions can be done digitally. Our digital investments and High-Tech/High-Touch strategy help us deliver more personalized experiences for customers regardless of whether they choose a digital or in-person experience.
Despite greater digital adoption, our financial centers will continue to play an important role in delivering service and solutions. While fewer clients are visiting financial centers, they continue to desire personalized advice and guidance and can speak with specialists about their banking, lending and investing priorities at a financial center.
– Matt Elliott, Michigan Market President, Bank of America
What’s on the Horizon for the Financial Industry and How Do We Achieve Equity in Accessing Capital?
This entails all of us getting out of our comfort zone as COVID-19 has caused us to do. We must commit to improving the disparities in education, jobs, homeownership, healthcare, and the digital divide.
I believe the finance and banking industry will move toward embracing technology more, while continuing to maintain touch with customers. This will entail developing partnerships to enhance products and services to become more well-rounded to meet the expanded needs of customers.
We will only be able to achieve equity by embracing the data that demonstrates clearly that inequities exist. Secondly, we must take actions on these inequities by making them a part of our value system. Once we get beyond a “check the box” orientation on equity and behold it as a value, we will then see our region grow through economic development, inclusion, and most importantly, equity.
– Kenneth Kelly, Chairman and Chief Executive Office, First Independence Bank
What Role Will Big Data Play in Adjusting to Consumer Demands and Financial Product Offerings?
Our greatest learnings are on the digital side, where there has been an expected increase in activity. We are largely witnessing reinforcement of what we already knew: simple transactions are increasingly moving online and the pandemic has accelerated that. We’re proud that our #1 rated app made it convenient for customers to conduct their transactions from their homes and we expect many of these new behaviors to continue.
At the same time, more complicated decisions still lead customers to want to interact with a banker. We have the #1 branch share in Michigan, and we are committed to our branches and in-person presence while also investing in tools and products that will help our customers. That’s why we are continuing to invest in technology, and innovations that will help our customers rebuild their financial lives. This includes an additional $150 million over the next three years in technology investments that we intend to accelerate given the COVID environment.
– Sandra Pierce, Senior Executive Vice President, Private Bank and Regional Banking; Director and Chair of Michigan, Huntington